UPSC Prelims Marathon 2 May – Capital Market in India – 2025

With reference to the Capital Market, consider the following statements:
1.Capital Market participants include only institutional investors and commercial banks.
2.Both individuals and governments can act as borrowers in the capital market.
3.Pension funds and insurance companies act as suppliers of capital in the capital market.
Which of the statements given above is/are correct?

With reference to the Capital Market in India, consider the following statements:
1.Instruments of the capital market include shares, debt securities, and derivatives only.
2.Stock exchanges are part of the capital market infrastructure and act as a platform for buying and selling financial instruments.
3.SEBI, RBI, and the Union Ministry of Corporate Affairs are among the key regulatory bodies of the capital market. Which of the statements given above is/are correct?

With reference to the types of Capital Market, consider the following statements:
1.The Primary Market deals with the trading of previously issued securities listed on stock exchanges.
2.The Secondary Market provides a platform for investors to buy and sell existing securities to meet their liquidity needs.
3.Companies raise fresh capital through the Secondary Market.
Which of the statements given above is/are correct?

With reference to the Capital Market, consider the following statements:
1.The price of securities in the Primary Market is determined by the issuing company, whereas in the Secondary Market it is driven by market demand and supply.
2.Investors can only buy securities in the Primary Market, while they can both buy and sell in the Secondary Market.
Which of the statements given above is/are correct?

With reference to Public Issues in the Primary Market, consider the following statements:
1.An Initial Public Offering (IPO) refers to the first-time sale of shares by an unlisted company to the general public.
2.A Follow-on Public Offering (FPO) is used by a company to sell its shares to the public before it gets listed on a stock exchange.
Which of the statements given above is/are correct?

With reference to various types of issues in the Primary Market, consider the following statements:
1.In an Offer for Sale (OFS), the company directly offers its securities to the public without involving intermediaries.
2.A Bonus Issue involves issuing additional shares to existing shareholders out of the company’s distributable profits.
3.A Qualified Institutional Placement (QIP) allows listed companies to issue securities specifically to Qualified Institutional Buyers (QIBs) without going through standard public issue procedures.
Which of the statements given above is/are correct?

With reference to the components of the Secondary Market, consider the following statements:
1.The Over-The-Counter (OTC) Market involves direct trading between two parties without the use of a centralized exchange.
2.The Stock Exchange Market is a decentralized platform where securities are traded informally between investors.
3.OTC Markets are generally subject to less regulatory oversight compared to stock exchanges.
Which of the statements given above is/are correct?

With reference to Stock Exchanges in India, consider the following statements:
1.The Bombay Stock Exchange (BSE) is Asia’s first stock exchange and offers depository services through Central Depository Services Limited (CDSL).
2.The National Stock Exchange (NSE) introduced India’s first screen-based electronic trading system.
3.A stock exchange in India can operate without government recognition if it meets international regulatory standards.
Which of the statements given above is/are correct?

With reference to Stock Market Indices in India, consider the following statements:
1.A Stock Market Index reflects the overall performance of a segment of the market and is usually based on a weighted group of selected stocks.
2.The BSE Sensex represents the price movements of the top 50 companies listed on the Bombay Stock Exchange.
3.The Nifty Junior index includes companies ranked immediately after the Nifty 50 based on market performance.
Which of the statements given above is/are correct?